Judge: "Dell Has Engaged In Repeated Misleading, Deceptive And Unlawful Business Conduct"
A state judge in Albany, NY has found that Dell "has engaged in repeated misleading, deceptive and unlawful business conduct,including false and deceptive advertising of financing promotions and the terms of warranties, fraudulent, misleading and deceptive practices in credit financing and failure to provide warranty service and rebates."
In addition, the judge also found that Dell Financial Services "has engaged in repeated misleading, deceptive and unlawful business conduct, including false and deceptive advertising of financing promotions, fraudulent, misleading and deceptive practices in credit financing and improper debt collection practices."
NY's Attorney General, Andrew Cuomo, sued Dell and Dell Financial Services for depriving consumers of the technical support they were entitled to under their warranty or service contract by:
repeatedly failing to provide consumers who purchased service contracts promising “onsite” and expedited service with timely onsite repair;
- for pressuring consumers, including those who purchased service contracts promising “next day onsite” repair, to remove the external cover of their computer and remove, reinstall, and manipulate hardware components;
- discouraging consumers from seeking technical support; those who called Dell’s toll free number were subjected to long wait times, repeated transfers, and frequent disconnections;
- for using defective “refurbished” parts or computers to repair or replace consumers’ equipment.
The lawsuit also accused Dell's financing operation of luring customers into high interest rate financing deals by using a "bait-and-switch" tactic. Dell advertised "no interest" or "no payment" financing, but according to the lawsuit, "the vast majority of consumers, even those with very good credit scores, were denied these deals. "
In addition, the lawsuit also alleged that Dell incorrectly billed customers on canceled orders, returned merchandise or on accounts that were fraudulently opened. The AG's office says that "Although many consumers repeatedly contacted Dell and/or DFS to advise them of the errors, DFS did not suspend its collection activity and Dell failed to expeditiously credit consumers’ accounts, even after assuring consumers it would do so. As a result, many consumers have been subjected to harassing collection calls for months on end and have had their credit ratings harmed."
For more information about how this lawsuit affects Dell customers in New York state, please click here. According to the Wall Street Journal, Dell has no comment at this time.
Decision and Order in NY vs Dell (PDF)[NY AG]
PREVIOUSLY: Help New York Sue Dell By Filling This Complaint Trough
NY Sues Dell For So-Called "Award-Winning Service"
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Comments:
If Spitzer were still the AG, all Dell would have to do is get a couple high-priced hookers to solve the problem.
If I were the CEO of Dell, I'd sell the company and give the money back to the shareholders.
Work for Dell, burn in hell!
Dude, you're going to jail o.o
If only, yes?
Wow, how the mighty have fallen.
I used to work in Dell tech support. I worked for an independant firm that contracted with Dell. I was surrounded by idiots that went through a couple of weeks of training, had no special computer knowledge and no support from supervisors. At the time Dell was moving back from India and some product lines were still being handled by techs on the subcontinent. If I needed to ship a part, I had call India to get approval. Cases were almost never followed up on. The most common solution was to reformat using the special recovery partition. I was ashamed to work there and glad that I never have to look back. I support New York in their efforts.
Personally have had nothing but good luck with Dell computers and sales so thankfully have never had to deal with a service issue.
Though their service seems to 'suck'...do they have a more than industry standard component failure rate?
@4ster: +1
Too bad Michael Dell didn't do that back when they maxed out at $50 a share. They've been stuck in the low-20s for all of 2008.
Dell is probably going to take this "very seriously" and then forget about it and put the court on hold for years.
Wow. This judge must be a consumerist reader, he ripped Dell to shreds. Holy moly, justice does prevail!
Like we always say in the field:
"Oh Hell, Its a Dell"
Dell got ripped badly this time. I wonder how much lower the stock can sink. Perhaps they'll fix their practices this time? Or will more outsourcing take place to cut the expenses down?
New York consumers are lucky to have Andrew Cuomo as their Attorney General.
@kspray--dad: I'm with you.
I've been in "the business" for almost 25 years supporting mostly small businesses and the medical field.
Dell, HP, Gateway, Compaq, doesn't matter who, they are going to go through periods of suck.
In the past 5 years i've had the best success with Dell.
Prior to that it was Compaq, pre merger.
I don't know if Dell has a failure rate higher than anyone else. But this financing story is interesting. Personally I haven't had any problem with them. But I usually only deal with their business line and support. I have a $17,000 line of credit with them, enough to outfit a small office if a customer requires it. But I've rarely carried a balance with it for more than 3 months.
one bone of contention with me is their laptop replacement policy.
I know in the past they have, at their discretion, replaced instead of repaired a laptop. Usually with a refurb that was of questionable quality.
On the plus side, Dell will probably pour a lot of money into "Taking this Seriously" and service on the consumer end will improve.
@noiddog -- Yes, very rational, we don't like their business practices so let's wish them all a horrible, flaming death. Seems reasonable to me. Hope your family is very proud of you for such a wonderful approach to life. You asshole.
I was a victim of deals warranty and financing dept's, they deserve far worse.
i meant Dells not deals
Whew! Yes! Finally. Though I still say that if you purchase through their business services department, you get *way* better service. Not that that makes the actions described above ok.
I still remember when Dell was a good company with reps who would bend over backwards for the customer.
Sadly, that was in 1999, which is also the last time I bought a Dell.
I JUST YESTERDAY got screwed by Dell. My wife and I bought a lap top that we would have paid outright for, but were enticed into financing by a 0% interest for 6 months offer. Two months later, they retroactively charged me interest for the first months financing - which DIDN'T show up on the first bill - suggesting we had 0% interest.
I did the EECB, and got some idiot's call back that told me that I agreed to their terms when I accepted the interest rate.
I explained that the acceptance of the rate didn't suggest that I didn't get the 0% rate for a limited time. She told me we didn't qualify.
My wife didn't qualify! She has an 810 credit score.
FUCK DELL
@SuffolkHouse: As all of Dell's sales calls are recorded AFAIK, did you not just refer to your sales reference number on the EECB. Ask to listen to it yourself.
I've always had success with Dell for home use, but maybe that's because I've never had to deal with home support as I've never encountered a problem with a home system that I couldn't resolve and their computers generally seem well built. The only Dell I've ever had fail on me was in our lab and support was pretty straight forward: I figured out a stick of RAM had gone bad, the tech support guy had me verifying which stick it was with a Dell RAM tester, and then a new stick was sent overnighted to us.
While I haven't had any major problems with Dell, clearly many others have. I am glad a company is being held accountable for their actions. About damn time. Now if the Attorney General could add Comcast to the, "I'm Gonna Get You Sucka" list, I'd really be a happy camper.
It's funny how it is always the Attorney General from New York who figures out that the best way to ingratiate yourself to many voters is to champion their rights and fight big business who have stomped on them. No doubt Cuomo's political aspirations are behind his zeal but good for him. At least he is not like most who talk a good game just to get elected but then sit on their ass and do nothing. (Hello, Pelosi. Don't get too comfortable sitting in that big chair of yours on the Hill.)
Cuomo's actually been quoted a couple times on Comcast. Comcast is huge, and almost competitionless in parts of NY, here's hoping he'll throw some of that same attitude their way.
Dell. hehe.
@graymulligan: Comcast is the Al Capone of our day. They think they are so untouchable that they openly admit to their shenanigans without concern that anyone can do anything to stop them. Arrogant bastards.
Andrew "Elliot Ness" Cuomo would be a national hero if he took on Comcast. Fight the good fight for the people, Cuomo!!
Really? Nobody's thrown in the obligatory "get a Mac" comment yet? I'm almost disappointed, Consumerist.
We use Dells at work. They turn on and run. That's all they need to do. Never used them at home, but I've got their catalogs for 3 years for some reason.
Damn I wish i lived in new york. I was a victim of the Dell's Preferred Account offer. I was going to buy a cheap 6-700 dollar PC and the guy talked me up to a higher priced one. They approved me for 2000 with 12 months same as cash and no financing for a year. So since I just started college I bought pretty much everything I needed for class and a good PC. 1800 then got 60 days no interest and a 24% interest rate. Call and complain and couldn't get anybody who spoke decent english. Transfered like 4 times and hung up on once.
Luckily my parents paid it off immediately and I just paid them back with my next two grant checks that were going to go towards paying it off anyways.
@4ster: The CEO goes before the Board and represents the company. The Board represents the shareholders. The shareholders, own the company. Of course that is probably a very simplistic way of putting it.
I swore I would never buy a dell after we helped a friend troubleshoot theirs. On the cheaper models the power supply and motherboard were both proprietary. The power leads that go to the motherboard were different than wiring for an off the shelf power supply. The jacks on the motherboard were nothing like the ends on an off the shelf power supply.
I looked to see how much either part (the likely problem) was both through Dell and various other places online. $360 for either one, this was a $500 PC. That was when I swore I would never touch a Dell, ever. What a scam.
@Televiper: It's a reference to a statement Michael Dell made back in 1997. The exact quote was "What would I do? I'd shut it down and give the money back to the shareholders."
[news.cnet.com]
Just watch Dell weasel out of this one as it drags through endless appeals.
All I can say is thank god for the BBB. I dealt with regional managers, corporate execs, even the vp of sales in ca with no results on my Promotional Financing. One call to the BBB and DFS changed their story gave me my $ back and wiped my remaining DFS balance to a $0.00. I will never purchase a Dell product again, they are the armpit of the computer manufacters. "Wipes ass with apology letter from Dell & flushes it down"
I was on the receiving end of having to do work when I had paid for the on-site support. It bothered me that Dell was not living up to the expectations, but it did not bother me so much as to do anything about it. I am pretty technical so I just did it myself.
@Lambasted:Cuomo only has the power to go after companies that are violating NY laws against NY citizens. For example, look what he's done against the big banks' student loan abuses that affect NY residents. I don't know if Comcast is a big player in NY (unlike TimeWarner or CaleVision). But if enough affected NY consumers file legitimate complaints about Comcast with his Consumer Frauds Bureau, he'll be all over it like stink on shit.
I have one purchase experience with Dell and I haven't had any problems. Then again, one purchase experience counts as 100% doing the order online and not dealing with a sales rep, being damn near OCD in ensuring my purchase qualified for promotional financing, and being able to pretty much do 100% of my own tech support and upgrades. So yeah, not having to deal with any living people might be why I made out so well.
man... did someone wake up on the wrong side of dell.
I love my Dell laptop >.> But, I didn't mess around with financing... paid for it myself online (all 1200 dollars of it) Had one problem (that was my fault) and Dell overnighted me the part I needed after speaking to a person who spoke perfect English. Have had the same laptop for two years and it functions as new.
Dell doesnt care as much anymore because now 80% of their business is to the government.
Glad to have abandoned you a long long time ago Dell.
Everybody: pay cash. Save your money and buy it: no financing anything with anyone and we'll all be better off.
This hits home. My Dell Vostro wouldn't turn off, power button not working. First tech was from Qualserve. He replaced the motherboard, made problem worse. Second tech came out, replaced the palm rest. Now it won't stay on. Second tech was from Texas something or another (subcontractor). She claims a defective, refurbished, replacement motherboard, just like this judgment stated. Third tech will be out her later this week to replace motherboard (again), heatsink, and processor.
I'm on day 8 of this ordeal, so much for next business day on-site.
My personal rule is that no company I deal with ever gets a second chance if it tries to screw me over. In the last 10 years, I've bought 3 Dell desktops and a laptop, and have been very pleased with them.
That said, I always paid in full up-front. Financing schemes always give me the willies, and I've never used one for anything.
After the state of NY finishes with Dell, they can go after the competition. They all do the same thing.
I avoided all the big guys on my most recent purchase and went with a "boutique" company.
They contracted with a well-known tech support service for supposed "on site" service. It was just as hard getting onsite service from them as from Dell (or HP, Gateway etc).
It's no wonder 20% of consumers don't own a home computer. They've probably heard stories like this and were even more scared of taking the plunge.
@silencedotcom: 4ster already did, but his comment was in much better taste than the traditional "shoulda got a Mac" form. (Read the last section of the Michael Dell Wikipedia article if you don't know what he's alluding to.)
@Meg Marco, how did you beat Ben to the punch on this one? Good job!
Dude ... you're gettin' a subpoena!
I hope that all of the execs at dell die in a fiery plane crash. Oh what a day that would be....